Chubb Policy Helps Huge Cleanup Advance

Details of the coverage arrangement were not released, and the authority did not immediately respond to this reporter's request for more detail.

Mark Schussel, a representative for Chubb, was unaware of the announcement and later would say only: "We don't comment about customers and the coverages they may have with us."

An arrangement for the purchase of insurance was the final obstacle to overcome in consummating what the WQA called a "historic" deal.

The coverage "is the final piece of the puzzle necessary for the companies and the valley's water agencies to sign a comprehensive agreement to clean up the water and ensure a reliable drinking water supply in the Baldwin Park-Azusa area," 17 miles east of Los Angeles, WQA said.

According to the authority, the parties are scheduled to sign the $250 million arrangement tomorrow.

"We are pulling into the station after a very, very long ride," said Bob Kuhn, chairman of the WQA board. "This agreement ensures that local water rate payers will not bear the burden of the cleanup costs."

The Baldwin Park-Azusa area is the largest of five San Gabriel Valley areas placed on the federal Superfund list by the U.S. Environmental Protection Agency after traces of industrial contaminants were detected in the groundwater. Migrating plumes of underground contamination have forced closure of more than 30 of the valley's water supply wells.

The California Legislature created the San Gabriel Basin Water Quality Authority in 1992 to coordinate and accelerate the cleanup.

U.S. Rep. David Dreier, R-San Dimas, was credited with getting $85 million in federal funds earmarked to help with the cleanup, and U.S. Sen. Barbara Boxer, D-California, helped keep the deal alive when it was threatening to fall through last December, WQA said.

Aerojet and the other companies–Azusa Land Reclamation Company Inc., Fairchild Holding Corp., Hartwell Corp., Huffy Corp., Oil & Solvent Process Company, Reichold Inc., and Wynn Oil Company–agreed in late January to fund the $250 million cleanup. WQA said the deal wasn't signed pending resolution of the insurance and several other side issues.

The parties reached agreement on insurance and the other issues this week, WQA said, with the companies agreeing to fund the premium for the more than $5 million policy for coverage that will be provided by Chubb.

After the signing, the deal still must be approved by the Los Angeles County Superior Court judge responsible for adjudicating water rights in the valley. WQA officials said they were confident the approval would be forthcoming. The judge's approval is needed to secure the participation of the Main San Gabriel Basin Watermaster.

Aerojet and 19 other responsible parties were identified as the source of the contamination in the Azusa-Baldwin Park area after years of study and investigation by the U.S. Environmental Protection Agency, WQA said.

Aerojet, according to the authority, was identified as the source of the largest quantity of contamination, and it took several more years for the EPA to designate an acceptable comprehensive cleanup project.

In addition to Aerojet and the seven others who agreed to the deal, there are 11 responsible parties identified by the EPA in the Azusa-Baldwin Park area that refused to participate in the negotiations. They remain at risk for legal action by other parties to recover a fair share of the project costs, WQA said.

Urgency projects completed with WQA participation have removed 10 tons of contaminants from the basin–more than half of all contamination removed since 1979. But this is only a small portion of the total contaminants that will be removed by the cleanup facilities outlined in the EPA's cleanup plan for the Basin.